Comment: Sell auto mfg stocks after the initial burst (Score 1) 648
I would imagine that auto manufacturers would get a huge initial sales boost for something like this as society converts over. But consider the ramifications:
Taxis and car rentals become fungible. You need a car, you call a number, and it appears 30 minutes later.
The proverbial "two car family" becomes "one car + on-call spare". Why sink tens of thousands in a car that you only use occasionally?
I expect car rental companies will grow, auto manufacturers will shrink (instead of selling X spare cars to families which are only occasionally used, they sell a much smaller Y spare cars to rental companies, which see a much higher usage rate).
Car rental companies who buy by the tens of thousands have more negotiating strength that the average person. That means a reduced profit margin for the manufacturer.
So between the drop in individual sales and the drop in profit margin, I expect the auto industry is going to be more competitive than before. "Competitive" does not usually make stockholders very happy.
Given the strategic position auto manufacturing has in national economies, expect bail-outs instead of bankruptcies. This will further hurt competitor's bottom-line.
Think the auto industry is cutthroat today? Just wait.